Bed, bath and beyond financial statement analysis case

You will find all the data in an excel file and information about the KEY HIGHLIGHTS in a word file (both of which I attached)Please format answers in document showing work and in organized fashion

Requirements – Calculate the below Ratios for 2023 (I provided the excel formula and answer for
Using the KEY HIGHLIGHTS FILE and financial data throughout the five years for Bed Bath and Be
a. Trends in the company’s Liquidity position including its ability to pay current liabilities (LIQUIDITY
b. Ability to sell inventory (ASSET MANAGEMENT RATIOS)
c. Trends in the company’s ability to pay long-term debt (SOLVENCY RATIOS)
d. Profitability trends (PROFITABILITY RATIOS)
2023
LIQUIDITY RATIOS:
Current Ratio: Current Assets / Current Liabilities
Quick Ratio: (Current Assets – Inventory) / Current Liabilities
2022
1.14
0.31
ASSET MANAGEMENT RATIOS:
Inventory Turnover = cost of goods sold / average inventory
3.17
115.15
Number of days in inventory = 365 / inventory turnover
Total Assets Turnover = sales revenue / average total assets
1.36
SOLVENCY RATIOS:
Times Interest Earned Ratio: EBIT / Interest expense
Debt/TA ratio
Debt/Equity ratio
-4.38
0.97
28.46
PROFITABILITY RATIOS:
Operating Return on Assets = EBIT / total assets
Net Return on Assets = Net income / total assets
Return on Equity = Net income / equity
Gross Profit Margin ratio = gross profit / sales revenue
Operating Profit Margin = EBIT / sales revenue
Net Profit Margin = net income / sales revenue
-0.08
-0.11
-3.21
0.32
-0.05
-0.07
Note: below I gave you formula used in practice to predict bankruptcy and as you can see as of 2023 bankruptcy
Multivariate Bankruptcy Prediction Models Using Multiple Discriminant Analysis
Altman’s Z-score = 1.2 (net working capital/total assets) + 1.4 (retained earnings/total assets) + 3.3 (NEBIT/total as
2023
2022
Net working capital / total assets
Retained earnings / total assets
NEBIT / total assets
Market value of equity / book value of equity
Sales / total assets
-0.63
0.10
-1.25
0.00
2.40
0.06
1.88
-0.08
0.01
1.53
Altman’s Z test for bankruptcy
Net working capital / total assets
Retained earnings / total assets
NEBIT / total assets
-0.75
0.14
-4.12
0.07
2.64
-0.26
Market value of equity / book value of equity
Sales / total assets
Altman’s Z score
0.00
2.40
-2.33
0.00
1.53
3.98
Z-scores of less than 1.81 indicated a high probability of bankruptcy, while Z-scores higher than 3.0 indicat
formula and answer for 2018 through 2022)
ars for Bed Bath and Beyond Corp discuss:
ent liabilities (LIQUIDITY RATIOS)
2021
2020
2019
2018
1.58
0.85
1.55
0.70
1.88
0.62
1.83
0.57
3.25
112.39
3.23
112.92
2.96
123.20
2.81
130.11
1.30
1.55
1.77
1.78
-10.81
0.80
4.06
-1.25
0.77
3.41
11.59
0.61
1.57
16.32
0.59
1.44
-0.05
-0.02
-0.12
0.34
-0.04
-0.02
-0.09
-0.08
-0.35
0.32
-0.06
-0.06
-0.01
-0.02
-0.05
0.34
-0.01
-0.01
0.11
0.06
0.15
0.36
0.06
0.03
see as of 2023 bankruptcy was predicted
ssets) + 3.3 (NEBIT/total assets) + 0.6 (market value of equity/book value of liabilities) + 1.0 (sales/total assets
2021
2020
2019
2018
0.21
1.58
-0.05
0.00
1.43
0.17
1.33
-0.09
0.00
1.43
0.28
1.69
-0.01
0.00
1.83
0.26
1.61
0.11
0.00
1.75
0.25
2.22
-0.17
0.21
1.86
-0.30
0.33
2.37
-0.04
0.31
2.26
0.36
0.00
1.43
3.72
0.00
1.43
3.21
0.00
1.83
4.49
0.00
1.75
4.67
es higher than 3.0 indicated a low probability of bankruptcy
BED BATH AND BEYOND, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In Thousands, Except per share data)
Feb. 25, 2023
Feb. 26, 2022
ASSETS
Current Assets:
Cash and Cash Equivalents
Restricted cash
Short-term investment securities
65,853
66,242
439,496
Merchandise Inventory
817,553
Prepaid Expenses and other assets
Assets held for sale
Total Current Assets
Long-term restricted cash
Long-Term Investment securities
Property and Equipment, Net
Operating Lease Assets
Goodwill
Other Assets
Total Assets
147,261
1,725,410
198,248
1,096,909
15,262
0
50,143
965,882
2,363,154
97,021
2,225,217
157,962
5,130,572
19,212
1,027,387
1,562,857
Liabilities and Shareholders Equity
Current Liabilities:
current portion of long-term debt
Accounts Payable
Accrued Expenses and other current liabilities
Merchandise Credit and Gift card liabilities
Current Operating Lease Liabilities
Preferred stock warrant liabilties
Derivative liabilities
Liabilities related to Assets held for sale
Current income taxes payable
Total Current Liabilities
Other Liabilities
Operating Lease Liabilities
Income Taxes Payable
Long-Term debt
Total Liabilities
646,005
457,924
244,432
272,277
301,194
404,441
169,611
872,445
529,371
326,465
346,506
2,495,884
131,500
1,278,467
93,241
1,026,133
5,025,225
2,074,787
102,438
1,508,002
91,424
1,179,776
4,956,427
3,823
2,428,439
225,058
(5,457,379)
51
3,441
2,235,894
9,666,091
(11,685,267)
(46,014)
Shareholders Equity
Common stock
Additional Paid-in Capital
Retained Earnings
Treasury Stock at cost
Accumulated other comprehensive loss
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
Number of shares outstanding
market price at end of fiscal year
Market value of equity
(2,800,008)
2,225,217
174,145
5,130,572
259,033
$1.53
$396
81,979
$16.17
$1,326
Feb. 27, 2021
Feb. 29, 2020
March 2 2019
1,352,984
1,000,340
508,971
346,140
488,329
485,799
2,618,922
296,280
378,039
2,730,874
516,025
2,905,660
197,912
3,620,045
385,642
2,093,869
248,342
98,092
3,826,285
3,909,972
3,971,078
3,591,901
19,545
918,418
1,587,101
20,380
1,430,604
2,006,966
20,010
1,853,091
19,517
1,909,289
89,592
1,837,129
391,052
396,416
6,570,541
716,283
424,639
7,040,806
697,085
606,948
6,822,655
1,094,078
623,734
339,322
1,197,504
633,100
335,081
1,179,088
484,114
309,478
20,498
2,077,632
395,409
2,165,685
431,592
59,821
2,032,501
511,303
49,235
1,487,934
4,010,210
62,823
1,492,078
4,152,178
67,971
1,491,603
4,103,378
3,426
2,118,673
11,112,887
(10,616,045)
(58,610)
3,418
2,057,975
11,343,503
(10,467,972)
(48,296)
3,395
1,974,781
11,003,890
(10,215,539)
(47,250)
1,671,909
595,152
311,821
6,456,930
506,280
7,790,515
986,045
636,329
312,486
360,061
944,194
675,776
340,407
463,005
March 3 2108
Febr. 25 2017
43,144
2,294,921
82,279
1,509,767
102,664
1,190,363
5,179,994
2,466,526
204,926
1,818,783
46,945
1,488,400
6,025,580
3,432
2,152,135
10,225,253
(11,048,284)
(55,600)
3,436
2,167,337
10,374,826
(10,715,755)
(64,909)
1,276,936
6,456,930
1,764,935
7,790,515
2,560,331
6,570,541
2,888,628
7,040,806
2,719,277
6,822,655
109,621
$26.86
$2,944
126,528
$10.81
$1,368
132,233
$15.51
$2,051
140,498
19.56
$2,748
146,274
35.90
$5,251
BED BATH AND BEYOND, INC., and SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in Thousands, Except per share data)
Net Sales
Cost of Sales
Gross Profit
Selling, General and Administrative Expenses
Impairments, including on Assets held for sale
Restructuring and Transformation Initiatives Expenses
Loss on sale of businesses
Operating Loss
Interest Expense, Net
Loss on perferred stock warrants and derivative liabilties
Loss on deconsolidaton of subsidiaries
Loss (gain) on extinguishment of debt
Loss before provision (benefit) from income taxes
Provision (Benefit) from Income Taxes
Net Loss
Net Loss per share (basic)
Weighted average shares outstanding (in shares)
Payment of dividends
Dividends declared per share (in $ per share)
Feb. 25, 2023 Feb. 26, 2022
5,344,685 $ 7,867,778
5,384,287
4,129,802
1,214,883
2,483,491
2,372,969
2,692,292
1,287,529
36,531
330,024
144,025
0
18,221
(2,775,639)
(407,578)
110,497
64,702
639,444
0
98,633
0
(94,343)
376
(3,529,870)
(472,656)
(31,069)
86,967
$ (3,498,801)
$ (559,623)
$ (36.03)
97,106
(329)
0.00
$ (5.64)
99,249
(749)
0.01
Feb. 27, 2021
$ 9,233,028
6,114,947
3,118,081
3,224,363
127,341
102,202
1,062
(336,887)
76,913
0
0
(77,038)
(336,762)
(185,989)
$ (150,773)
$ (1.24)
121,446
(23,108)
0.19
March 2 2019 March 3 2018 Febr. 25 2017
Feb. 29, 2020
$ 11,158,580
$12,028,797
12,349,301
12,215,757
7,616,920
7,924,817
7,906,286
7,639,407
3,541,660
4,103,980
4,443,015
4,576,350
3,681,210
3,681,694
3,441,140
3,732,498
509,905
0
509,226
0
0
0
0
0
0
0
0
0
(700,064)
(87,135)
761,321
1,135,210
69,474
65,661
69,555
64,789
0
0
0
0
0
0
0
0
0
0
0
0
(764,853)
(156,609)
695,660
1,065,655
-19,385
270,802
380,547
(151,037)
$ (613,816)
$ (137,224)
$ 424,858
$ 685,108
$ (4.94)
124,352
(85,482)
0.69
$ (1.02)
134,292
(86,287)
0.64
$ 3.05
139,238
(80,877)
0.58
$ 4.61
148,590
(55,612)
0.37
BED BATH AND BEYOND, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in Thousands)
Cash Flows from Operating Activities
Net Loss
Feb. 25, 2023
(3,498,801)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and Amortization
Gain on sale of building
Impairments, including on assets held for sale
Loss on perferred stock warrants and derivative liabilties
Stock based Compensation
Realized loss on sale of available-for-sale investment securities
Deferred Income Taxes
Loss on sale of businesses
Loss on deconsolidaton of subsidiaries
Loss (gain) on debt extinguishment
Loss on sale leaseback transaction
Other
Decrease (increase) in Assets:
Merchandize Inventory
Trading in Investment Securities
Other current Assets
Other Assets
(Increase (decrease) in Liabilities:
Accounts Payable
Accrued Expenses and other Current Liabilities
Merchadise Credit and gift card liabilities
Income taxes payable
Deferred rent and other liabilities
Operating lease assets and liabilities, net
Other liabilities
Net Cash provided by operating activities
427,087
0
1,287,529
639,444
19,394
1,411
(37,586)
0
98,633
(94,343)
0
2,827
874,237
0
46,453
11,355
(365,772)
(262,530)
(53,837)
2,300
0
(86,785)
(1,995)
(990,979)
Cash Flow from Investing Activities
Purchases of held to maturity investment securities
Redemption of held to maturity investment securities
Proceeds from sale of available-for-sale investment securities
Deconsolidatin of subsidiaries cash, cash equivalents and restricted cash
Proceeds received from notes receivable
Net proceeds from sales of businesses
Net proceeds from sales of property (building)
Proceeds from sale leaseback transaction
0
0
18,864
(10,545)
25,832
0
0
0
Capital Expenditures
Investment in Unconsolidated Joint Venture
Payment for acquisitions, net of cash required
Net Cash used in (provided by) Investing Activities
(332,886)
0
0
(298,735)
Cash Flow from Financing Activities
Borrowing of Long-term debt
Repayments of Long-term debt
Payment of Senior Notes
Repayments of Finance leases
Repayment under share repurchase agreement
Payment of other liabilities
Repurchase of common stock, including fees
Issuance of common stock and at-the-market common offering, net of offering costs
Proceeds from issuance of Series A and preferred and common stock warrants
Proceeds from exercise of preferred stock warrants
Payment of dividends
Payment of exchange offer costs
Payment of issuance costs related to Series A and preferred and common stock warrants
Payment of deferred financing leases
Proceeds from exercise of stock options
Net Cash used in Financing Activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash
Net (decrease) increase in cash, cash equivalents and restricted cash
Change in cash balances classified as held-for-sale
Net (decrease) increase in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash:
Beginning of period
End of period
1,590,000
(926,199)
0
(3,206)
0
0
(46,146)
118,975
225,008
47,500
(329)
(7,992)
(6,334)
(24,242)
0
967,035
(848)
(323,527)
0
(323,527)
470,884
147,357
Feb. 26, 2022 Feb. 27, 2021
Feb. 29, 2020
(559,623)
(150,773)
March 2 2019 March 3 2018 Febr. 25 2017
(613,816)
(137,224)
424,858
685,108
293,626
0
36,531
340,912
0
127,341
342,511
0
509,226
338,825
(29,690)
509,905
313,107
0
0
290,914
0
0
35,061
31,594
45,676
58,514
70,510
71,911
125,711
18,221
148,741
1,062
(145,543)
0
(104,089)
0
175,351
0
24,878
0
376
0
(8,298)
(77,038)
0
(396)
0
27,357
(3,446)
(412)
0
(814)
0
0
(69)
0
0
(1,032)
(53,339)
0
387,746
607
64,947
0
(387,172)
1,519
506,334
0
(4,781)
239
106,928
86,277
269,186
218
176,672
(16,036)
(258,853)
(4,754)
(38,493)
(18,780)
(18,464)
(14,480)
(132,785)
(100,356)
13,981
(11,257)
0
(14,162)
(14,186)
17,854
168,556
15,538
(12,110)
54,958
0
(32,813)
(26,758)
268,108
(124,206)
61,864
1,154
(22,783)
0
(2,899)
14,054
590,941
(90,657)
(77,147)
16,016
8,360
(35,918)
0
0
918,278
13,210
80,375
25,510
(64,941)
(75,251)
0
0
859,689
49,458
(8,586)
11,390
(8,307)
17,754
0
0
1,043,271
(29,997)
30,000
0
386,500
(443,500)
545,000
(734,424)
538,925
(292,500)
0
0
86,240
0
5,000
0
534,457
0
0
0
0
267,277
0
11,183
0
0
0
0
0
0
0
(354,185)
0
0
(349,182)
(183,077)
0
0
737,880
(277,401)
0
0
91,376
(325,366)
0
0
(509,682)
(375,793)
0
(6,119)
(674,412)
(373,574)
(3,318)
(201,277)
(491,929)
0
(11,360)
0
(1,033)
0
0
(589,433)
236,400
(457,827)
0
0
(47,550)
0
(332,529)
0
0
0
0
0
0
(99,710)
0
0
(4,224)
0
0
0
(148,073)
0
0
0
0
0
(434)
(252,433)
0
0
0
0
0
0
(547,022)
(749)
(23,108)
(85,482)
(86,287)
(80,877)
(55,612)
(3,443)
0
(606,018)
1,006
(936,340)
0
(936,340)
(7,690)
0
(632,304)
5,075
378,759
4,815
383,574
0
2,346
(182,846)
(977)
498,494
(4,815)
493,679
0
0
(238,584)
(7,181)
162,831
0
162,831
0
10,313
(323,431)
(4,035)
(142,189)
0
(142,189)
0
20,424
(582,210)
3,624
(27,244)
0
(27,244)
1,407,224
470,884
1,023,650
1,407,224
529,971
1,023,650
367,140
529,971
509,329
367,140
536,573
509,329
INTANGIBLE ASSETS, NET
On June 12, 2023, we entered into an Asset Purchase Agreement with Bed Bath & Beyond Inc. (“BBBY”), and certain subsidiaries, to acqui
certain intellectual property assets of the Bed Bath & Beyond banner from BBBY. On June 27, 2023, under a Bankruptcy Court supervised
process, the U.S. Bankruptcy Court for the District of New Jersey approved the sale of the assets to the Company and on June 28, 2023, BBB
delivered all intellectual property assets via an Intellectual Property Assignment Agreement. The total purchase price, inclusive of direct
acquisition-related expenses totaled $25.6 million which has been allocated to two major asset categories consisting of $21.8 million for tra
names with an indefinite useful life and $3.8 million for customers lists with an estimated useful life of five years.
Intangible assets, net consist of the following (in thousands):
June 30,
2023
Intangible assets subject to amortization, gross (1)
$
5,331
December 31,
2022
$
Less: accumulated amortization of intangible assets
-1,551
-1,543
Intangible assets subject to amortization, net
3,780
9
Intangible assets not subject to amortization
21,803
—
Total intangible assets, net
___________________________________________
$
25,583
$
and certain subsidiaries, to acquire
r a Bankruptcy Court supervised
mpany and on June 28, 2023, BBBY
hase price, inclusive of direct
onsisting of $21.8 million for trade
of five years.
December 31,
2022
1,552
-1,543
9
—
9
difference
3,779
Key Highlights (2022 10K report):
• Since 2019, we have undertaken significant changes to transform our
business and adapt to the dynamic retail environment and the evolving
needs of our customers in order to position ourselves for long-term success.
We have created a more focused portfolio through the divestiture of noncore assets and further strengthened our financial flexibility through key
actions such as corporate restructurings and operating expense control to
re-set our cost structure.
• Our management team, led by President and Chief Executive Officer (CEO)
Mark Tritton, has been focused on driving an omni-always, customerinspired strategy to re-establish our authority in the Home, Baby, Beauty &
Wellness markets. We have created a more focused portfolio through the
divestiture of non-core assets and further strengthened our financial
flexibility through key actions such as corporate restructurings and
operating expense control to re-set our cost structure and support our
ongoing business transformation.
• Started in 2021:
Restructuring and Transformation Initiatives Expenses
144,025
102,202
• Our merchandise and services are offered to customers through an omnichannel platform across our portfolio of four core banners, which consist of:
Bed Bath & Beyond, buybuy BABY, Harmon Health and Beauty, Decorist.
We offer a broad assortment of national brands and a growing assortment
of proprietary Owned Brand merchandise in key destination categories
including bedding, bath, kitchen food prep, home organization, indoor
décor, baby and personal care. We are implementing a growth strategy that
will harness the power of data and insights to engage customers across our
four core banners in an enterprise-wide plan to accelerate our omnichannel transformation. Our strategy is underpinned by five key pillars of
strategic focus and investment: product, price, promise, place and people.
Through this approach, we are becoming a digital-first, customer-focused
omni-channel retailer with a more curated, inspirational and differentiated
product collection across categories, and creating a more convenient and
inspirational shopping experience.
• We are driving a digital-first, omni-always growth strategy and optimizing
our digital and physical store channels to provide our customers with a
seamless omni-channel shopping experience. Digital purchases, including
web and mobile, can be shipped to a customer from our distribution
facilities, directly from vendors, or from a store. Successful execution of our
omni-channel and transformation strategy is dependent, in part, on our
ability to establish and profitably maintain the appropriate mix of digital
and physical presence in the markets we serve.
• Store purchases are primarily fulfilled from that store’s inventory or may
also be shipped to a customer from one of our distribution facilities, from a
vendor, or from another store. Customers can also choose to pick up orders
and contactless Curbside Pickup services, as well as return online purchases
to a store, or have an order delivered through one of our delivery partners.
As of February 26, 2022, we had distribution facilities totaling
approximately 4.4 million square feet. We have partnered with Ryder
System, Inc. to develop and operate two new regional distribution centers
to provide merchandise to regional stores for both in-store shopping and
online shopping services.
• Ongoing coronavirus (COVID-19) pandemic has materially disrupted our
operations to date. In compliance with relevant government directives, we
closed all of our retail banner stores across the U.S. and Canada as of March
23, 2020. In May 2020, we announced a phased approach to re-open our
stores in compliance with relevant government directives, and as of the end
of July 2020, nearly all of our stores reopened.
• During Fiscal 2020, we divested five non-core businesses generating
approximately $534 million in net proceeds, which were reinvested in our
core business operations to drive growth, fund share repurchases and
reduce our outstanding debt.
•
substantial portion of merchandise is shipped through distribution facilities
that are located throughout the United States. The remaining merchandise
is shipped directly from vendors.
• Purchased substantially all merchandise in the United States, with the
majority from domestic sources (who may manufacture overseas) and the
balance from importers. The portion of our merchandise that we purchase
directly from overseas sources is increasing and represented approximately
22% of our total purchases in Fiscal 2021.
• In Fiscal 2021, we purchased our merchandise from approximately 4,600
suppliers with our largest supplier accounting for approximately 5% of our
merchandise purchases and the ten largest suppliers accounting for
approximately 23% of such purchases. We have no long-term contracts for
purchases of merchandise. We believe that most merchandise, other than
brand name goods, is available from a variety of sources and that most
brand name goods can be replaced with comparable merchandise.
• We operate in a highly competitive business environment. We compete
with other national, regional, and local physical and online retailers that
may carry similar lines of merchandise, including department stores,
specialty stores, off-price stores, mass merchandise stores and online only
retailers.
• We believe that the key to competing in our industry is to provide best-inclass customer service and customer experiences in stores and online,
which includes providing compelling price and value; high-quality and
differentiated products.
• Our business is subject to seasonal influences. Generally, our sales volumes
are higher in the calendar months of August (back to school/college),
November and December (holiday), and lower in February.
• General economic factors that are beyond our control have materially
adversely affected and could continue to materially adversely affect our
business. These factors include, but are not limited to, recent supply chain
disruptions, labor shortages, wage pressures, rising inflation and the
ongoing military conflict between Russia and Ukraine, as well as housing
markets, consumer credit availability, consumer debt levels, fuel and energy
costs (for example, the price of gasoline), interest rates, tax rates and policy,
unemployment trends, the impact of natural disasters such as pandemics,
civil disturbances and terrorist activities, foreign currency exchange rate
fluctuations, conditions affecting the retail environment for products sold
by us and other matters that influence consumer spending and preferences.
• Store and distribution center closures in compliance with certain
regulations. Potential inability of third parties on which we rely, including
our suppliers, commercial banks and other external business partners, to
meet their obligations to us. Significant reductions in demand or significant
volatility in demand for our products. Delays, interruptions and disruptions
in our supply chain and higher shipping charges have impacted and could
continue to impact our ability to maintain supplies of products and the
costs associated with obtaining products.
• As part of our ongoing business transformation, we have been executing a
store fleet optimization program that included the closure of approximately
200 mostly Bed Bath & Beyond stores by the end of Fiscal 2021. In
connection with this program, we incurred approximately $92.4 million in
costs including contract termination costs, employee-related costs,
professional fees and non-cash impairment charges, of which approximately
$47.9 million was incurred in Fiscal 2021.
Loss on sale of businesses
18,221
1,062
• Inflation can adversely affect us by increasing the costs of materials, labor
and other costs required to manage and grow our business. We may be
unable to raise prices enough to keep up with the rate of inflation, which
would reduce our profit margins and returns.
• We may have amounts of cash and cash equivalents at financial institutions
that are in excess of federally insured limits. While we closely manage our
cash and cash equivalents balances to minimize risk, if there were disruptions
in the financial markets, we cannot be assured that we will not experience
losses on our deposits, and it may negatively impact the availability and cost
of capital.
• Share Repurchases: In response to the COVID-19 pandemic, in March 2020,
we postponed our plans for share repurchases and suspended the payment
of dividends and planned debt reductions. We recommenced share
repurchase programs on October 28, 2020, and in Fiscal 2020 entered into
accelerated share repurchase programs on October 28, 2020 and January 7,
2021 (as amended on January 29, 2021), totaling $375.0 million. In Fiscal
2021, we announced that we intended to complete our $1 billion three year
repurchase plan by the end of Fiscal 2021, two years ahead of schedule,
and completed share repurchases of $574.9 million, bringing cumulative
repurchases under this plan to approximately $950.0 million through
February 26, 2022. An additional approximately $40.0 million was
repurchased in March of 2022. Since 2004 through the end of Fiscal 2021,
we have repurchased approximately $11.685 billion of our common stock
through share repurchase programs.
• We lease substantially all of our existing stores. The leases provide for
original lease terms that generally range from 10 to 15 years and most
leases provide for a series of 5-year renewal options, often at increased
rents.
• Approximately $100 million in annual savings from our previously disclosed
store fleet optimization program which included the planned closure of
approximately 200 mostly Bed Bath & Beyond stores. Approximately $100
million in annual savings from our previously disclosed store fleet
optimization program which included the planned closure of approximately
200 mostly Bed Bath & Beyond stores. Approximately $100 to $150 million
in annual selling, general and administrative expense savings from
continued optimization of our corporate overhead cost structure.
• In connection with the above restructuring and transformation initiatives,
during Fiscal 2021, we recorded total expense of $281.2 million including
$137.2 million in cost of sales, primarily associated with the transition of
our product assortment to Owned Brands and, to a lesser extent, to
redefine certain existing Owned Brands, as well as $144.0 million in
restructuring and transformation initiative expenses for costs associated
with our planned store closures as part of the store fleet optimization
program and other transformation initiatives. We also recorded impairment
charges of approximately $36.5 million, primarily related to store assets.
• We completed the divestitures of the following banners:
In December 2020, we entered into a definitive agreement to sell Cost Plus
World Market to Kingswood Capital Management.
In October 2020, we entered into definitive agreements to sell Christmas Tree
Shops (“CTS”) to Handil Holdings LLC.
In October 2020, we entered into a definitive agreement to sell Linen Holdings
to The Linen Group, LLC, an affiliate of Lion Equity Partners.
In February 2020, we entered into a definitive agreement to sell
PersonalizationMall.com (“PMall”) to 1-800-FLOWERS.COM.
During the first quarter of Fiscal 2020, we also sold One Kings Lane to a third
party.
The net proceeds from these transactions have been reinvested in our
core business operations to drive growth, fund share repurchases and
reduce our outstanding debt.
• We commenced renovations of approximately 130 stores, of which
approximately 80 were completed, to bring the expression of the new Bed
Bath & Beyond to our customers in many of our markets. We completed the
planned optimization of our store fleet through the closure of 63 mostly Bed
Bath & Beyond stores during Fiscal 2021, bringing total store closures for the
overall program to 207 as of February 26, 2022.
• Net loss for Fiscal 2021 was $559.6 million, or $5.64 per diluted share,
compared with net loss of $150.8 million, or $1.24 per diluted share, for
Fiscal 2020. Net loss for Fiscal 2021 included a net unfavorable impact of
$4.66 per diluted share associated with restructuring and other
transformation initiatives, non-cash impairments, loss on sale of business
and loss on debt extinguishment.
•
Fiscal Year Ended
February 26,
2022
(in millions)
February 27,
2021
C
February 29, 2020
Net sales
$
7,867.8 $
9,233.0 $
11,158.6
Gross Profit
$
2,483.5 $
3,118.1 $
3,541.7
Operating Loss
$
(407.6)
336.9
700.1
• Interest expense, net was $64.7 million, $76.9 million, and $64.8 million in
Fiscal 2021, 2020, and 2019, respectively.
• Liquidity: As of February 26, 2022, we had approximately $439.5 million in
cash and cash equivalents, a decrease of approximately $913.5 million as
compared with February 27, 2021.
• Capital expenditures: for Fiscal 2021 were $354.2 million, and for Fiscal
2022 are projected to be approximately $390.0 million to $410.0 million.
Our capital expenditures in Fiscal 2021 were related to digital and omnichannel capabilities, store remodels and investments in technology across a
number of areas including supply chain, merchandising and finance. Key
areas of investment include: continuing to improve the presentation and
content as well as the functionality, general search and navigation across
our customer facing digital channels; improving customer data integration
and customer relations management capabilities; continuing to enhance
service offerings to our customers; continuing to strengthen and deepen
our information technology, analytics, marketing, e-commerce,
merchandising and finance capabilities; and creating more flexible
fulfillment options designed to improve our delivery capabilities and lower
our shipping costs. These and other investments are expected to, among
other things, provide a seamless and compelling customer experience
across our omni-channel retail platform.
• During Fiscal 2021 we purchased approximately $11.0 million aggregate
principal amount of our outstanding 3.749% senior unsecured notes due
August 1, 2024. During Fiscal 2020, we purchased approximately $300.0
million aggregate principal amount of our outstanding 4.915% Senior Notes
due 2034 and 5.165% Senior Notes due 2044.
• Net cash provided by operating activities for Fiscal 2021 was $17.9 million,
compared with net cash provided by operating activities of $268.1 million in
Fiscal 2020.
• Net cash used in investing activities for Fiscal 2021 was $349.2 million,
compared with net cash provided by investing activities of $737.9 million in
Fiscal 2020. For Fiscal 2021, net cash used in investing activities included
$354.2 million of capital expenditures. For Fiscal 2020, net cash provided by
investing activities was comprised of $386.5 million of redemptions of
investment securities and $534.5 million in proceeds from the sale of PMall,
CTS and Linen Holdings businesses, partially offset by $183.1 million of
capital expenditures.
• Net cash used in financing activities for Fiscal 2021 was $606.0 million,
compared with net cash used in financing activities of $632.3 million in
Fiscal 2020. Net cash used in financing activities in Fiscal 2021 was primarily
comprised of repurchases of common stock of $589.4 million, of which
$574.9 million was related to our share repurchase program, repayments of
long-term debt of $11.4 million and payments of deferred financing costs of
$3.4 million.
• Net cash used in financing activities in Fiscal 2020 was comprised of net
repayments of long-term debt of $221.4 million, a $47.6 million
prepayment under an accelerated share repurchase agreement with
JPMorgan Chase Bank, National Association entered into in October 2020,
repurchases of our common stock of $332.5 million, payments of deferred
financing costs of $7.7 million and dividend payments of $23.1 million.
• The Amended Credit Agreement provides for an asset-based revolving
credit facility (the “ABL Facility”) with aggregate revolving commitments
established at closing of $1.0 billion, including a swingline subfacility and a
letter of credit subfacility. The Amended Credit Agreement has an
uncommitted expansion feature which allows the borrowers to request, at
any time following the delivery of an initial field exam and appraisal, an
increase in aggregate revolving commitments under the ABL Facility or elect
to enter into a first-in-last-out loan facility, collectively, in an aggregate
amount of up to $375.0 million, subject to certain customary conditions.
The Amended Credit Agreement matures on August 9, 2026.
• Dividends: During Fiscal 2021, 2020, and 2019, total cash dividends of
$0.7 million, $23.1 million, and $85.5 million, respectively, were paid. Any
future quarterly cash dividend payments on its common stock will be
subject to the determination by the Board of Directors.